The business behind the show

Advisory firm questions Steve Jobs' reelection to Disney board

March 21, 2011 | 3:17
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On the eve of the Walt Disney Co.'s annual meeting Wednesday in Salt Lake City, an influential shareholder advisory firm is raising questions about the decision to recommend the return of Steve Jobs to the entertainment giant’s board despite his frequent absences.

While stopping short of recommending a vote against Jobs' reelection to the Disney board, Institutional Shareholder Services said the media company’s largest individual shareholder had attended fewer than 75% of board and committee meetings in three of the last four years. The firm acknowledged Jobs’ ongoing medical problems but said that shareholders deserved more of an explanation for his nomination.

Disney said in a January regulatory filing that Jobs’ ability to attend board meetings had been hampered by health considerations. Jobs, who was diagnosed with pancreatic cancer in 2004, underwent a liver transplant in 2009. He took an unexplained medical leave of absence in January from Apple Inc., where he serves as chief executive.

ISS, which advises large institutional holders on proxy matters, wrote that it generally considers illness to be a valid explanation for director absences. But it said the Disney board decision to recommend Jobs' return, despite “persistent absenteeism,” warranted greater disclosure.

“Jobs’ poor attendance in three of the past four years, and recent leave of absence from his primary employer, raises questions about his ability to fulfill his responsibilities as a director of the company,” ISS wrote in a recommendation to shareholders.

Criticism of the lack of disclosure about Jobs’ illness has dogged Apple since 2008, when he began showing dramatic weight loss. The technology giant’s shareholders voted on — but rejected — a resolution last month that would have required the company to divulge its succession plans should Jobs be unable to continue as CEO.

The AFL-CIO, which holds about 3.8 million Disney shares in union funds, voted against Jobs’ return to the Disney board.

Brandon Rees, deputy director of the AFL-CIO office of investment, said it was difficult for full-time chief executives like Jobs, who have responsibilities to their own shareholders, to attend board meetings for another publicly traded company.

“We would consider that as a reason to vote against a director,” Rees said, adding that Jobs’ medical complications have further contributed to his absenteeism.

Jobs, who holds more than 7% of Disney’s stock, has served as a director of the company since its 2006 acquisition of Pixar Animation Studios, where he served as chairman and CEO.